RAM MANGLI JASSI,DELHI V. INCOME TAX OFFICER, ASSESSMENT UNIT, INCOME TAX DEPARTMENT

ITA 2277/DEL/2024

AI Insights

The case involves an appeal by Ram Mangli Jassi against the order of the Commissioner of Income Tax (Appeals), which pertained to the assessment year 2017-18. The primary issue was the addition of Rs.9,69,104 to the assessee's income, which represented the difference between the purchase price of an immovable property and its circle rate. The property was purchased jointly with her husband, but the entire addition was made in the assessee's name. The Tribunal found merit in the assessee's argument that the property was purchased at a market rate lower than the circle rate and that the addition should have been proportionate to her share in the property.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 298872 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 09-05-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: VI SHAL MISHRA; CHARTERED ACCOUNTANT
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Valuation report; Value adopted by valuation officer
• Section: 56(2)(vii)(b); 50C

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एसएमसी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.2277/िदʟी/2024 (िन.व. 2017-18) ITA No.2277/DEL/2024 (A.Y.2017-18) Ram Mangli Jassi, 80/301, Sector I, Gole Market, R.K Ashram Marg, DIZ Area, Delhi 110001 PAN: APBPJ-2828-P ...... अपीलाथᱮ/Appellant बनाम Vs. Income Tax Officer, Assessment Unit, Income Tax Department, Central Delhi, Delhi ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri Vishal Mishra, Chartered Accountant ŮितवादीȪारा/Respondent by : Shri Sanjay Kumar, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 01/10/2024 घोषणा कᳱ ितिथ/ Date of pronouncement : : 14/10/2024 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 11.03.2024, for assessment year 2017-18. 2. Shri Vishal Mishra, appearing on behalf of the assessee submitted that during the period relevant to assessment year under appeal, the assessee purchased immovable property in the joint name with her husband Shri Navtej 2 ITA No. 2277/Del/2024 (AY 2017-18) Jassi. The said immovable property was purchased at the cost of Rs.42,00,000/- after availing loan facility from Can Fin Homes Ltd., Rs.40,00,000/-. The Assessing Officer (AO) observed that circle rate of property is Rs.51,69,104/- therefore, he proposes to make addition of difference between the purchase price and the circle rate. The assessee explained before the AO that the actual market rate of property at the time of purchase was below the circle rate applicable to the immovable property. The AO without referring valuation of the immovable property to the Valuation Officer made addition of the difference between purchase price and the circle rate i.e. Rs.9,69,104/-. The ld. Counsel for the assessee further pointed that the property was purchased in joint names, however, the AO has made entire addition in the name of assessee. If, at all any addition was required to be made after referring the valuation to the Valuation Officer, the addition could be made only to the extent of assessee’s share in the property. The entire addition cannot be made in the hands of assessee. 3. Per contra, Shri Sanjay Kumar representing the department vehemently defending the impugned order prayed for dismissing appeal of the assessee. He submitted that the assessee never asked for reference to the Valuation Officer for valuation of immovable property. 4. Both sides heard, orders of the authorities below examined. The solitary issue in appeal is qua addition of Rs.9,69,104/- made u/s. 56(2)(vii)(b) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). It is an undisputed fact that the assessee had purchased immovable property in joint name with her husband Shri Navtej Jassi for Rs.42,00,000/-. It is also not disputed that the circle rate at the time of purchase was Rs.51,69,104/-. The contention of the assessee is 3 ITA No. 2277/Del/2024 (AY 2017-18) that the market rate of property at the time of purchase was less than the circle rate. Section 50C of the Act provides for reference to Valuation Officer where the assessee claims before the Assessing Officer that the value adopted by the Stamp Valuation Authority u/s. 50C(1) of the Act exceeds the fair market value of property as on the date of transfer. In the instant case the AO without seeking valuation report from the Valuation Officer made addition of the difference between the purchase price and the circle rate. Further, the AO made addition of the entire amount (difference between the purchase price and the circle rate) in the hands of the assessee, whereas, the property was purchased in the joint names i.e. in the name of assessee and her husband. 4.1. I find merit in the submissions of Counsel for the assessee. I deem it appropriate to restore this issue back to the file of AO for denovo assessment after seeking valuation report from the Valuation Officer as on the date of purchase of property. Thereafter, still any addition is required to be made based on the valuation report, the addition shall be restricted to the extent of assessee’s share in the property. 5. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on Monday the 14th day of October, 2024. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 14/10/2024 4 ITA No. 2277/Del/2024 (AY 2017-18) NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "